intoroduction to statistics

(1)

Statistics for

B

i

d E

i

Business and Economics

Why Study Statistics?

(2)

Dealing with Uncertainty

Everyday decisions are based on incomplete

information

Consider:

The price of IBM stock

will

be higher in six months

The price of IBM stock

will

be higher in six months

than it is now.

If the federal budget deficit is as high as predicted,

interest rates

will

remain high for the rest of the year.

(3)

Dealing with Uncertainty

Because of uncertainty the statements

(continued)

Because of uncertainty, the statements

should be modified:

The price of IBM stock is

likely

to be higher in six

months than it is now.

If the federal budget deficit is as high as predicted, it

is

probable

that interest rates will remain high for the

rest of the year.

(4)

Tools of Business Statistics

D

i ti

t ti ti

Tools of Business Statistics

Descriptive statistics

Collecting, presenting, and describing data

Inferential statistics

D

i

l

i

d/

ki

d

i i

Drawing conclusions and/or making decisions

concerning a population based only on

sample data

(5)

Descriptive Statistics

Collect data

e g Survey

e.g., Survey

Present data

e.g., Tables and graphs

Summarize data

e.g., Sample mean =

X

i

n

∑

(6)

Inferential Statistics

Estimation

e.g., Estimate the population

mean weight using the sample

mean weight

Hypothesis testing

e.g., Test the claim that the

population mean weight is 120

pounds

Inference is the process of drawing conclusions or

p

g

(7)

Populations and Samples

A

Population

is the set of all items or individuals

of interest

E

l

All lik l

t

i th

t l

ti

Examples:

All likely voters in the next election

All parts produced today

All sales receipts for November

A

Sample

is a subset of the population

Examples:

1000 voters selected at random for interview

Examples:

1000 voters selected at random for interview

A few parts selected for destructive testing

Every 100

th

receipt selected for audit

(8)

Population vs Sample

Population vs. Sample

b

d

Population

Sample

a b c d

ef gh i jk l m n

b c

g i n

o p q rs t u v w

x y z

o r u

y

(9)

Data Types

Data

Qualitative

(Categorical)

Quantitative

(Numerical)

Discrete

Continuous

Examples:

Marital Status

Discrete

Continuous

Political Party

Eye Color

(Defined categories)

Examples:

Number of Children

Defects per hour

Examples:

Weight

Voltage

Defects per hour

(Counted items)

Voltage

(Measured

(10)

Data Types

Time Series Data

Ordered data values observed over time

Cross Section Data

Data values observed at a fixed point in time

(11)

Data Types

Sales (in $1000’s)

2003

2004

2005

2006

Time

Atlanta

435

460

475

490

Boston

320

345

375

395

Time

Series

Data

Cleveland

405

390

410

395

Denver

260

270

285

280

Cross Section

D t

(12)

Data Measurement Levels

Ratio/Interval Data

Highest Level

Complete Analysis

Measurements

Ordinal Data

Higher Level

Mid level Analysis

Rankings

Ordered Categories

Mid-level Analysis

Categorical Codes

g

Nominal Data

Lowest Level

Basic Analysis

Categorical Codes

ID Numbers

Category Names

(13)

The Decision Making Process

Decision

Knowledge

Experience, Theory,

Literature, Inferential

St ti ti

C

t

Information

Descriptive Statistics

Statistics, Computers

Begin Here:

Identify the

Data

Descriptive Statistics,

Probability, Computers

(14)

Task

Make an article about

statistics roles in

business research

. Article should be typed with

font times new roman 12 or Arial 11 space 1 5

font times new roman 12 or Arial 11, space 1.5,

paper size A4, and minimum length 3 pages.

Article must be submitted on second meeting

Article must be submitted on second meeting.

Remember, lateness cannot be accepted!